The leader of Thanet council has denied the authority has had to write off more than £3m owed by the collapsed ferry company Transeuropa.

In a new twist to the saga, it has emerged the council has only unsecured creditor status - meaning it is a lower priority than others owed money by the company, which operated out of Ramsgate port. It went into administration in May owing Thanet more than £3m in unpaid berthing fees.

Cllr Clive Hart emphatically denied rumours the council has had to give up its battle.

Asked about the reports, he said: “That is not true at all.”

However, he declined to answer any other questions.

In a separate statement, Thanet council said it had not sought secured creditor status at the time it agreed the secret deal allowing Transeuropa to defer paying port fees because it had the right to seize assets in the port.

The statement said: “As it was in the council’s capability as port authority to seize Transeuropa assets in the port to cover any debts, a secured status was not sought at the time the arrangement was set up.

"Prior to the liquidation of Transeuropa, the council had met with the company’s investors to discuss the debt and was satisfied with the agreed payment plan in place for recovery.

"Seizing the vessel at this time would have sent Transeuropa into liquidation, the council would still not have recovered the debt and this would have also resulted in the loss of many jobs and income to the economy.”

Administrators are auctioning the company’s ferry Gardenia this weekend in Belgium. The council is unlikely to realise any money from the sale - or from the two other vessels.

However, the Ostend Port Authority, which also had an arrangement with Transeuropa to defer port fees and is owed about £2.5m, can expect to as it is a secured creditor.

Opposition Green councillor Ian Driver said questions needed answering about why the council had not sought to safeguard itself its position.

In a letter to council chief executive Sue McGonigal, he writes: “This is something which the Ostend authorities, who were taking similar risks to Thanet council, thought was a prudent thing to do, but which Thanet did not.”

The secret deal was set up by the council’s former Conservative administration in 2011 and continued when Labour took control of the council